After multiple meetings with Bangladesh Bank, the International Monetary Fund (IMF) has agreed to release $1.3 billion of the $4.7 billion loan package in June, previously in limbo due to disagreements over greater exchange rate flexibility through a crawling peg.

Sources at the central bank confirmed that a press conference would be held on Wednesday, where Bangladesh Bank Governor Dr Ahsan H Mansur would join virtually from Dubai and confirm the developments.

Earlier, an IMF staff mission led by Chris Papageorgiou visited Dhaka on April 6-17 to conduct a combined third and fourth review of Bangladesh’s economic reform program under the Extended Fund Facility (EFF), Extended Credit Facility (ECF), and the Resilience and Sustainability Facility (RSF).

According to meeting sources, the global lender insisted on implementing a truly flexible exchange rate — one that went beyond minor adjustments and eliminated multiple exchange rate windows.

The central bank, however, insisted on being restrained, citing risks of inflationary shocks and political pushback.

So far, Bangladesh has received three installments totalling $2.3 billion from the IMF’s $4.7 billion loan package.

Following the breakdown of talks in February over the release of the fourth tranche, amounting to $645 million, Bangladesh’s finance ministry clarified that the delay stemmed from the need to fulfil mutually agreed-upon conditions.

The disbursement will be made in June after satisfactory completion of the review scheduled in April and approval by the IMF Board in June 2025, the ministry said last month.